Economics is often used in literary studies, but rarely free market economics. Austrian economics, with its emphasis on subjective value (Menger), human action (Mises), spontaneous order and knowledge (Hayek), and entrepreneurship (Kirzner), seems a particularly fruitful source of ideas for literary studies.

Monday, January 31, 2011

If there is anyone likely to be directly relevant to Austrian economics and literature, it is Don Lavoie, author of Economics and Hermeneutics. The title alone should tell you why. Unfortunately, I am in no position to buy a book this expensive -- so I'm afraid it will have to wait.

Sunday, January 30, 2011

I recently saw the 2008 Russian film, Hipsters -- which, I think has a poorly translated title. The Russian title, Стиляги or, transliterated, Stilyagi, refers to the name given to renegade rock and roll fans during the Soviet Union. The movie depicts the black market for colorful clothes, secret parties, and records carved into x-rays.

Aside from the wonderful spectacles and music in the movie, I enjoyed the explicit theme of individualism vs. collectivism. It struck me that the komsumoltsi, the grey-clad, badge adorned, ideologically driven youth constantly harassing the Stilyagi, raiding their parties, ruining their clothes, were volunteers. It was as Lew Rockwell often observes. There aren't enough bureaucrats and government security forces to police us all. Tyranny requires the oppressed to enslave themselves.

I use Austrian economics in my analyses of literature and in understanding literary and artistic production because as far as I can tell it is the only tradition in economics which most closely matches the reality of human action and of our social existence in the extended order. I reject Marxism precisely because its metaphysics, epistemology, ethics, sociology, and economics are about as unconnected to reality as one could imagine (even Marx more or less admitted this when he argued that the point was not to understand the world, but to change it). But there are other economic theories that are much more closely related to reality, such as those of Milton Friedman, J. M. Keynes, and Samuelson. So why not them?

Well, one can't deal with every tradition, so let us then deal with one of the most dominant competitors to Austrian economics, Keynesianism.

What would a Keynesian sociology of literary or artistic production look like? First, we would have to figure out what it means for there to be aggregate demand for and supply of literature. Then one would have to figure out how one would boost the aggregate demand for literature, and under what conditions one would want to do so. But then, what would that even mean? Would a loss of interest in surrealistic poetry result in an attempt to boost consumer demand? Or, since focusing on surrealism would mean one has disaggregated the data, would it just be a general loss of interest in poetry, meaning there is a poetry recession, if you will? How would one go about boosting consumer demand for poetry?

Let us ignore these difficulties and think about what would happen in a Keynesian literary economy. If our government could figure out how, and we did boost aggregate demand for literature, that would result in more people going into writing, resulting in a misallocation of human resources into the arts, where they find they now are able to make a good living. Since the field is currently dominated by those who are only obsessed enough to create literary works, any boost in demand would result in more supply being required, meaning more people would be pulled into literary production. These would be people looking to make money rather than good art. The result would be a general reduction in the quality of literature. The result would be a literature bubble, with an inevitable bust (people can only read so much). So a Keynesian approach to literary production would result in a proliferation of bad writers producing bad literature, resulting in a literature bubble and subsequent crash, where the reputation of the literary arts would be harmed, having been exposed as something people are doing not because they love the art, but because they thought they could make a quick buck. A Keynesian approach to literature would do nothing but harm the art. It may help a few good artists during the boom, but it's not likely that the great artists would be the ones to survive the recession. And it would take years to recover the reputation the artists had before. Of course, in the meantime, Keynesian policies would try to reinflate the bubble, making the problem even worse over time.

So, what would a Keynesian sociology of literary or artistic production look like? It certainly doesn't look anything like real artistic production. I hope I have made the case in my paper on The Spontaneous Orders of the Arts and my posts on this blog that the assumptions of Austrian economics result in a theory of artistic production that most closely resembles reality. It would be strange if the underlying structures of one social order were not fundamentally the same as those of the rest of the social orders -- the scientific order, the religious social order, the economy, etc. These are all theories of humans interacting on fairly large scales. So any social theory which resulted in a bizarre description of one order would be expected to give rise to a bizarre description of another. On the other hand, one may argue that while the literary order does work according to the strictures of Austrian economic/social theory, that it ought to work according to the strictures of Keynesian theory. Of course, I have already pointed out what the consequences of that would be.

Tuesday, January 25, 2011

In it he argues for a fairly radical subjectivism of artistic judgment. I'm not sure such holds up -- how can one judge what is art at all, let alone judge art? The solution may lie in Wittgenstein's idea of family resemblances -- that whatever it is that makes all of a certain kind of object overlap is what makes it art. Of course, a careful reading of Plato shows that that is all Socrates was ever pointing out to any of the experts he talked to. Such an approach may not answer the question of "what is art?" in a way that completely satisfies -- but then, dissatisfaction is what drives innovation in the first place.

Monday, January 24, 2011

The sign of a good social scientist is that he can say something fundamental about how people act in one spontaneous social order that will be equally applicable in another such that all one has to do is change a few nouns specific to one spontaneous order to make it applicable to another. Consider this statement by Mises:

The mentality of the promoters, speculators, and entrepreneurs is not different from that of their fellow men. They are merely superior to the masses in mental power and energy. They are the leaders on the way toward material progress. They are the first to understand that there is a discrepency between what is done and what could be done. (Human Action, 336)

Mises is of course talking about action in the catallaxy. But it is equally applicable to the artistic order:

The mentality of the artists, musicians, and literary writers is not different from that of their fellow men. They are merely superior to the masses in mental power and energy. They are the leaders on the way toward artistic change. They are the first to understand that there is a discrepency between what is done and what could be done.

Change the same nouns, and you can use the same statement about the scientific order.

The implication is that there are in fact deep structural similiarities among these different kinds of spontaneous orders. The job of spontaneous orders scholars and researchers is to discover these structural similarities. At the same time, we have to note and understand the differences as well. Prices are a vital element to the catallaxy, but are essentially irrelevant to the artistic orders. Artistic coordination (or scientific coordincation) occurs in a different way than economic coordination. As Butos and McQuade have observed in their papers on the scientific order, reputation is central. But what is it in the artistic orders?

Sunday, January 23, 2011

Tyler Cowan has a very short piece on the most expensive video art. Apparently "Bill Viola's Eternal Return sold for $712,452 in 2000." Considering that video can be very easily copied, this seems a bit much, to say the least. I suppose part of the agreement of buying the piece could have been that the video could not be copied, but then this raises questions of who the owner of the piece is. Is it the creator or the buyer? A contract might establish some sort of co-ownership, I suppose, but some questions about ownership of works of art could be raised here.

Suppose I bought a Monet. Could I burn it in my back yard? Why is it that your gut instinct was "of course not!" no matter how strong a property rights supporter you are? What does this imply about our deep beliefs about the relationship between art and society? Is that merely cultural? It might be for paintings, but don't other cultures hold particular objects so sacred that even if you own it, others feel like they have a right to object to your damaging or destroying it on purpose?

But let's get back to the video. What is its status? After all, if you copy it, isn't it the same art piece? Surely in the case of video art, it doesn't actually involve the actual video tape itself (or DVD), but the content. And the content is copyable in such a way that it's the same thing -- much like a print run is a run of the same thing (though the lower the number, the more the print is worth -- the first being worth the most, of course). Do copies reduce the price value of the original video? If not, why not? Is there something about it being the first, on that tape or DVD, that makes it more valuable? Is it because, in essence, the artist actually touched it, manipulated that particular tape? Then what is the relative value of the content? How much does it matter? Would it have the same value if produced anonymously? If not, why not?

I suppose too that there are many at the Mises Institute who would have something to day about the property rights involved.

Saturday, January 22, 2011

Dr. Geoffrey Allen Plauche has launched Prometheus Unbound, an ezine featuring "news, reviews, and commentary on fiction and literature, particularly science fiction and fantasy, from a libertarian perspective." This publication may interest readers of this site.

A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value. ...the mere circumstance of creation of one product immediately opens a vent for other products. (J.B. Say, 1803: 138-9)

This is Jean-Baptiste Say on what became known as Say's Law. Stated this way, it seems obvious that Say is arguing that the supply of one good creates demand for one or more other goods. There are two ways of looking at this: 1) the supply of a new good creates a demand for whatever is needed to create that good, or 2) the supply of a new good creates demand for that good and for other, similar goods. It seems that it is in this second sense that it was understood by people like James Mill, who argued that

production of commodities creates, and is the one and universal cause which creates a market for the commodities produced. (Commerce Defended. 81)

This is of course the more commonly understood notion of Say's Law, such was summarized even further by Keynes as "supply creates demand." This caricature of Say's Law is the one we are most familiar with, and is even used by its defenders, though there are of course more complex understandings of it. The opposite of this is of course Keynes' reversal, that demand creates supply. This statement is, of course, absolutely true. But only for already-existing goods. There can be a demand for cars in 1990, but not for iPods and iPhones, as they have not been invented. They have to be invented -- and thus supplied -- for there to be a demand. Further, the invention of the iPhone resulted in a demand for not just it, but similar products. Thus, the EVO.

Nevertheless, even the caricature of Say's Law, that supply creates demand, is a useful idea, no matter whether it is a simplified version or not. It is in both this sense, and in the second sense listed above that Say's Law can be used to help us understand the creation of new kinds of literature and art. For example, there was no demand for stream of consciousness novels prior to James Joyce and Virgina Woolf. There could not have been, for people did not know that they would find such works interesting. Indeed, how could one demand a literary style that had never been available before? It's logically impossible. It takes someone like Joyce or Woolf to invent such a narrative style, to think the world needed to have something like this in it, for others to want it. Once such a demand was created, secondary products, such as William Faulkner's stream of consciousness novels, were then made possible out of this new demand. Indeed, the same can be said of each of the Modernist movements, whether in literature or in the arts. This is how a successful artistic movement is made. Someone somewhere has to invent a new way of seeing within that artistic genre; the new artistic style then has to generate a demand not just for that particular one, but for similar works; new artists respond to the demand by creating their own works in that style, expanding on that style, modifying it, reinventing it. A strong enough modification, reinvention of course results in the creation of something else entirely new that may or may not create a demand for it and future imitators.

If Keynes were correct that it is demand which creates supply, there would and could not be new movements in the arts. If we ignore the fact that Say's Law is necessary for art to have begun in the first place, whatever style of storytelling was first invented would have stayed in demand. Stylistically, nothing would have changed. Thus, Keynes' Law of demand creating supply is a law of an unchanging world. There are elements of the economy in which it is true that demand creates supply -- but only for already-established products. If there is a sudden demand for refrigerators, more will get made. If the demand for refrigerators goes down, fewer will get made. But already-existing goods is not the driver of the economy. When one has already-existing goods, one sees more and more automation, fewer and fewer resources going into the production of such goods. Agriculture is a good example of this. The vast majority of jobs and capital used to go into agriculture; now, it makes up a tiny, tiny, tiny percentage of the economy. Auto assembly is increasingly automated. But newly invented goods require more capital and more workers to create the new product. Once established, the entrepreneurial activity is directed toward making these goods cheaper to produce.

So what does all of this have to do with artistic production? Well, the creative artist is equivalent to the inventor-entrepreneur. People have to invest more into understanding a new style than they do to appreciate something already available. There are those who sort of act as venture captialists of new styles, trying to understand them, and promoting the new works. They invest much more than those who follow up over the years. It is easier to appreciate Faulkner in 2011 than in 1929. And it's less costly for readers and scholars. The continuing demand for Faulkner creates a supply of his works -- and of continuing scholarship. But then, this latter statement brings us back to Say's Law, as there could not be a supply of continuing scholarship if there had not been the initial supply of Faulkner. At the same time, it is easier to supply Faulkner scholarship precisely because there is a demand for it, with resultant classes, conferences, and journals, including journals dedicated exclusively to Faulkner. In addition, Faulkner's works influence the production of new works by new authors -- such as Milan Kundera, Toni Morrison, and Cormac McCarthy -- which in turn produce demand for classes, conferences, and journals for these authors.

What we then have is in fact a feedback loop between supply and demand. Understood this way, Say and Keynes are both right. Supply does create demand, and demand does create supply. But supply does have to come first for the feedback loop to begin, in the same way that creation precedes destruction (you cannot destroy what does not exist), as observed by Hector Sabelli in Bios. In the economy, the creation of something like the automobile destroys the horse-and-buggy industry. The same is not quite true in the arts, though. Postmodern literature does not supplant stream of consciousness in quite the same way. But that does not prevent other elements of entrepreneurship, supply, and demand to be at work in the creation of new styles in art.

Friday, January 21, 2011

The process of valuation of profit and loss is subjective from person to person. So based on this, should a work of art make its viewer into an entrepreneur so that he may speculate and find what it is that gives him the psychic satisfaction of a seemingly simple piece of art?

Indeed, the process of valuation of profit and loss is subjective from person to person. Especially when one doesn't have money to make things a bit more objective in that matter (I can think my business is profitable all I want, but if I lose money and go bankrupt, that's a pretty objective determiner of loss). So his statement that a work of art "makes its viewer into an entrepreneur so that he may speculate and find what it is that gives him the psychic satisfaction" is an excellent description of what happens. The valuation of each person for a given work of art -- be it literature, a work of visual art, music, etc. -- is of course subjective. We have plenty of cliches that cover that: there's no accounting for taste; beauty is in the eye of the beholder; etc. We lovers of great art like to think that if we educate people, they will learn to see how wonderful, deep, and complex great art is, and learn to love it too. The reality is that we can only reach so many people; the rest, well, there's no acocunting for taste.

But let us get back to this idea that a work of art makes its viewer into an entrepreneur so that he may speculate and find what gives him the psychic satisfaction of a piece of art. Let us look at what Mises says of the entrepreneur:

Economics, in speaking of entrepreneurs, has in view not men, but a definite function. This function is not the particular feature of a special group or class of men; it is inherent in every action and burdens every actor. (Human Action, 252-3)

So each person is in fact an entrepreneur. Mises goes on to say that

The term entrepreneur, as used by catallactic theory means: acting man exclusively seen from the aspect of the uncertainty inherent in every action. In using this term one must never forget that every action is embedded in the flux of time and therefore involves a speculation. (Human Action, 253)

Of course, this is the catallactic definition, as Mises says. What about the literary order entrepreneur? About what is a person speculating when choosing to engage with a work of art, or when engaging in a work of art? The person is seeking to profit, but in what way? After all, "the entrepreneur earns profit and suffers loss" (Mises, Human Action, 254). What gives him this "psychic satisfaction"? What would give him psychic dissatisfaction? These sorts of questions bring us to questions which may be more readily answered by such theories as literary Darwinism. The economics of the arts allows us to ask the questions, but not necessarily answer them -- in the same way that economics is concerned with values from the perspective of achieving your goals, but not from that of understanding where your values come from, or even why you're choosing to rank them one way or another at a given time. The Scottish Enlightenment philosopher Francis Hutcheson argues that beauty is unity in variety and variety in unity. One can make the same arguments about values: there are a variety of values, but we all seem to share the same set of values, even if we are each ranking them differently at different times. There are no doubt a few values which few share -- but the exceptions, at the extremes, do not negate the rule. The same can be said of our perception of what is beautiful in a work of art. There is likely to be widespread agreement on what is beautiful, but different rankings. Also, it is true that learning how to see something new can help you to learn to see it as beautiful. Van Gogh was unpopular during his lifetime, and the Impressionists (named by their critics) were widely reviled when their works first came out. Yet, who doesn't think van Gogh or the Impressionsts' works aren't beautiful? We have learned how to see them. Thus can judgments and values change.

Yet clearly, these works have to create some sort of psychic satisfaction. We have to find profit in them. And people obviously do. Impressionist exhibits at museums draw some of the largest crowds. Yet, at the same time, it is not necessarily high art that creates psychic satisfaction for everyone. Romance novels clearly do just this, as they would dominate the best seller list if they were in fact included in such lists. Clearly someone reading a romance novel is looking for a different kind of psychic satisfaction than someone reading Faulkner's The Sound and the Fury. You may have one reader who profits from each, another who profits from the romance novel and experiences loss with Faulkner, and yet another who experiences loss with the romance novel and profits from Faulkner. What goes into these valuations? Again, this is a question for psychological theories, not economic ones. Yet this kind of economic approach does raise some interesting questions.

Saturday, January 15, 2011

the gain derived from action; it is the increase in satisfaction (decrease in uneasiness) brought about; it is the difference between the higher values attached to the result attained and the lower value attached to the sacrifices made for its attainment; it is, in other words, yield minus costs. To make profit is invariablythe aim sought by any action. If an action fails to attain the ends sought, yield eithe does not exceed costs or lags behind costs. In the latter case the outcome means a loss, a decrease in satisfaction.

Profit and loss in this original sense are psychic phenomena and as such not open to measurement (Human Action, 289)

A work of art should yield profit in Mises's sense of the term. If it does, it is likely to be a work of beauty. If it does not, it is not a work of beauty. This is not a sufficient definition of beauty, of course, but it is a necessary element.

Beautiful works are those which are complex. There is a clear difference between the complex and the complicated -- though most people mistake the two. They are not equivalent, as we shall see.

Something is complicated if it appears difficult but is, in fact, simple. The word is derived from one which means "knotted." Something is complexi if it appears simple but is, in fact difficult. The word is derived from one which means "folded." Knotted and folded. A knot is difficult to undo, but when you get it undone, what was three dimentions is now but one. Something folded is already two dimensions, but we discover that there are layers upon layers under the surface. One has to go deeper and deeper to see just how much is there. One returns to the complex with benefit; once the complicated is unknotted, there it is -- a lot of hard work for a string.

In other words, a work which is complex is one which is profitable to read or view; a work which is complicated is one which creates loss, as the reader or viewer has spent a lot of time and work to go, "oh, is that all there is?" One returns to complicated things and experiences loss; one returns to complex things and experiences gain. Complication gives rise to simplicity; simple rules (as Stephen Wolfram shows in his work on cellular automata) give rise to complexity.

Art and literature should profit. Great works are thus complex works. But we have also seen that complex works are also apparently simple. They are both, simultaneously. A paradox? Well, that too is the nature of complexity.

Art and literature should contribute to the complexity of society. If they are themselves complex, they do so contribute. They complexify the minds of the readers and viewers, profiting them, making them psychicly wealthier by such profit, thus allowing them to behave in more complex fashion, with more different kinds of people, to contribute to the complexification of society.

Art and literature should emerge from the complexity of society. Thus would the arts and the society at large contribute to each other in feedback loops of ever-greater complexity, driving complexity.

This is but one of the ways one can evaluate a work's quality. But it may be one of the most important ones.

Friday, January 14, 2011

We received mention at Promoetheus Unbound a libertarian review of fiction and literature. This is encouraging, as I am fully convinced that real social change much begin in the culture. The arts and literature act as immanent criticism, as I've argued before, and this allows for cultural change at the margins. It may take a while, but eventually the effects can be felt. Consider the impact of a novel written back in 1957 -- Ayn Rand's Atlas Shrugged -- which has led to such things as the foundation of the Libertarian Party and eventually to the current conservative-libertarian climate. Of course, one cannot predict nor control where things end up -- Rand did not like the Libertarian Party, for example -- but that's the nature of spontaneous order, after all.

In my case, it didn't begin with Ayn Rand -- it began, rather, with a Christian Platonist philosopher, Ronald Nash, who was also a libertarian. I took him for Intro. to Philosophy, and ended up with my first lessons in economics, as he taught from his own book Poverty and Wealth. This led me to the library, where I read everything I could on capitalism, leading me to read Walter Williams, Milton Friedman, and many others -- among whom was Ayn Rand. So I did get to her eventually. Although I did read Hayek's The Road to Serfdom during this period, I wasn't really introduced to the Austrians until I was working on my Ph.D., when I took a Game Theory and the Humanities class from Frederick Turner, in which we read Hayek's Individualism and Economic Order. I bought a few more books by Hayek, and a few by Mises, with both Hayek and Mises (Human Action) ending up in my dissertation, Evolutionary Aesthetics. My invitation to submit a proposal, and then write and present a paper at the Fund for the Study of Spontaneous Orders led me directly into spontaneous order scholarship. An invitation to a colloquium on Hayek by Liberty Fund resulted in a full engagement of Hayek's writings and ideas. And now, somehow, I have been turned into a spontaneous order scholar and Austrian economics literary scholar.

Now, here's the clincher: I only took the Intro. to Philosophy class because the New Testament class I wanted was full, and I still wanted to fulfill one of those pesky required sections that I, as a recombinant gene technology major, found annoying. The class I took was the last class Nash taught at WKU before he retired and moved to Florida. Had the NT class not been full, I could have never taken Nash's class, and my life would be utterly different from what it is now.

You never know what tiny thing will have a huge effect. In chaos theory those are known as butterfly effects. Have we flapped a wing?

Thursday, January 13, 2011

on the market no vote is cast in vain. Every penny spent has the power to work upon the production processes. The publishers cater not only to the majority by publishing detective stories, but also to the minority reading lyrical poetry and philosophical tracts. (Mises, Human Action, 271)

It would seem that those who support the "common man" would thus be avid supporters of the free market system, as it provides them with their tastes. Of course, the fact that the market does in fact provide the common man with his tastes is the main complaint made against the market by the supposed friends of the common man. They complain that the market does not more readily supply poetry and philosophy -- meaning they believe in something which is patently untrue -- on the belief that if more poetry were available, more people would read it (another belief which is patently untrue).

The fact is that such critics are really upset that not everyone shares their elitist tastes. It doesn't upset me that most people don't share my tastes, so why should it bother them? Perhaps because they are uncomfortable being elitists as well as Marxists. They can solve this internal contradiction by insisting that everyone would share their tastes if the market didn't supply works of bad taste -- a statement which is patently absurd. It may also express a certain amount of laziness on their part, as the only way to get people to appreciate what they appreciate is to teach them to do so. But that takes hard work. Easier, then, to attack the free market for supplying it.

But let us think about what would really happen if democratic processes were applied to the economy. What would stay and what would go? Would a majority vote for lyrical poetry? Philosophy? Postmodern novels? Hardly. A majority would vote for romance novels, thrillers, and pornography. Isn't it better, then, if you like surrealist poetry, stream of consciousness novels, and Scholasticism, to have a free market system where you will have people willing to provide even the smallest market with their product?

The Marxist literary scholar thus cuts off his nose to spite his face. It is the market which supplies him with the works he loves.

Monday, January 10, 2011

Marxism has been used for a long time in literary studies, to discuss the representation of economics in works of literature and to discuss the methods and social structures of artistic/literary production. They have raised questions about how different classes have been represented in literature. These are interesting questions, even if one may be able to find better answers than the Marxists have come up with. For about a century now, Marxism has been the only economics used to analyze literature. I don’t think it’s a good way to analyze social reality, whether it be actual or represented in art — which is not to say that insights haven’t nevertheless been made because of Marxist analyses. I similarly don’t think that a Keynesian approach would tell us much, either — but, again, such an approach would no doubt uncover something of interest (and would be an improvement over Marxism in any case).For these reasons, it seems an Austrian economic approach would be beneficial. But there are more reasons than that.

It seems to me that if human action is represented in stories, then praxeology is a valuable tool to help understand that action. If economic interactions are represented in stories, then bringing an understanding of how the economy works is going to help us to understand what is going on in the story. And if we want to understand artistic and literary production, then we need a good theory of social organization, such as Hayek’s spontaneous order theory. I think Austrian economics is one of the best ways of interpreting social reality — which is why I am interested in further developing it to help interpret literary representations of that reality as well.

Overall, I am in favor of any interpretive strategy that helps us to understand the creation of and meanings of literature. I think that some strategies are better than others, and I think that some have outlived their usefulness (for currently existing literature — old methods can still be productively used for new works, of course). Austrian economics is a potentially fruitful approach, as I hope my comments to date have suggested. This approach should open up new ideas, and move us beyond Marxist analysis, much as evolutionary approaches have begun to move us beyond postmodernist/poststructuralist ideas in literary theory. (Dare I dream of a neuro-Hayekian/evolutionary psychology convergence?)

Sunday, January 9, 2011

The creative genius is at variance with his fellow citizens. As the pioneer of things new and unheard of he is in conflict with their uncritical acceptance of traditional standards and values. (Mises, Human Action, 267)

Mises then goes on to discuss the anti-bouregois and anti-capitalistic attitudes of these artists and of "The frustrated artists who take delight in aping the genius's mannerism in order to forget and to conceal their own impotence adopt this terminology" of the creative geniuses (268). Mises talks too about this phenomenon in The Anti-Capitalistic Mentality. While these observations are interesting in their own right, I am more interested in the observation Mises makes in the first two sentences quoted.

Indeed, for the artists of Mises's day, to be anti-capitalist was to be in conflict with the West's traditional standards and values. Whatever the commonly held values, the creative artist is sure to be challenging them. To be a pro-capitalist artist, one has to really, deeply understand the nature of economics and of the free market in order to understand that supporting it is very much to be in conflict with traditional standards and values. It is less work to just assume everyone supports free markets, even when they don't, than it is to learn enough economics to learn the truth.

Whatever the case, the creative artist is in the position of being a Hayekian immanent critic to the culture through his or her work (this is different from being an immanent critic within the artistic order, as I've discussed here). It is a shame that such criticism is often aimed at perceived tradition rather than actual tradition. In a strange twist, the collectivist world views of many artists are actually reflective of our real traditional standards and values. It seems to me that it would behoove artists, then, if they wish to really be in conflict with traditional standards and values, to learn what standards and values the general population actually holds.

Now, this of course assumes that that is what artists are trying to do. I would argue that anyone who is "trying" to be in conflict with said standards and values comes closer to being the "frustrated artists", since they are merely adopting a poise rather than being honest believers.

What this may in fact argue is that free market supporters need to target artists for education. There is much that is "new and unheard of" in free market economics for the average person that, if properly educated, the creative artist could and perhaps would in fact adopt and promulgate.

Saturday, January 8, 2011

A painter is a businessman if he is intent upon making paintings which could be sold at the highest price. A painter who does not compromise with the taste of the buying public and, disdaining all unpleasant consequences, lets himself be guided solely by his own ideals is an artist, a creative genius. (Ludwig von Mises, Human Action, 240n5)

Though he is not a writer, Damien Hirst immediately comes to mind. He may at one time have been an artist -- but now he but a businessman. There is certainly nothing wrong with being a businessman (Shakespeare brilliantly pulled off being both), but if one is but a businessman, one's products will go the way of all other products in the past, and eventually disappear from the market. The work of the artist does not pass away this way (the ravages of history notwithstanding), but rather gains in value over time. Further, it remains a work of art, rather than being something of mere historical interest.

The specific method of economics is the method of imaginary constructions.

This method is the method of praxeology. (Mises, Human Action, 236)

Let me rephrase this: "The specific method of the arts is the method of imaginary construction." And if we confine ourselves to plotted literature, we can add the second sentence.

Mises continues, defining what he means by "imaginary construction"(to which I shall bracket [author] and/or [literary theorist beside "economist" to emphasize the parallels):

An imaginary construction is a conceptual image of a sequence of events logically evolved from the elements of action eomployed in its formation. It is aproduct of deduction, ultimatey derived from the fundamental category of action, the act of preferring and setting aside. In designing such an imaginary construction the economist [author] is not concerned with the quesiton of whether or not it depicts the conditions of reality which he wants to analyze. Nor does he bother about the quesiton of whether or not such as system as his imaginary construction posits could be conceived as really existent and in operation. Even imaginary constructions which are inconceivable, self-contradictory, or unrealizable can render useful, even indispensalble services in the comprehension of reality, provided the economist [author/literary theorist] knows how to use them properly. (236)

Now this certainly seems to describe the work of the literary author who writes plotted fiction, whether it be short stories, novels, plays, epics, romances, or movies. Thus it seems that the economist, as understood by Mises, does similar work to the writer of plotted fiction. Both construct "what-if" scenarios to see what will then happen to the actors. Mises suggests, for example, that one could

conceive the category of action by constructing the image of a state in which there is no action, either because the individual is fully contented and does not feel any uneasiness or because he does not know any procedure from which an improvement in his well-bring (state of satisfaction) could be expected. (237)

Certainly the first scenario could not create a plot; but the second scenario has created a great deal of literature in the 20th century -- absurdist literature. One may perhaps be able to look at absurdist literature as conceiving of action through the creation of a kind of negative of action dues to the actor's inability to act, know knowing what actions would bring about his/her goal(s). Beckett in particular could be seen as the playwright extraordinare of this kind of lack of action.

Perhaps the best recommendation one could make to an economist, then, is for them to go to the theatre. Or at least the movies.

Thursday, January 6, 2011

If there is one thing we can count on, it's that if there is a spontaneous social order, there will be a government to attack it. We are familiar with the interventions into the economy, of course. And censorship of the arts is equally well-known. The Nazis and the Soviets both attacked science. The French even tried for a while to attack language itself with their language council designed to dictate what is truly "French." George Orwell, of course, warned against attacks on language and how language manipulation would lead to manipulation of the public itself. Recently Mario Rizzo discussed such word games in relation to the FDA.

So it should not surprise anyone that theatre is facing increasing attacks in places like Hungary, Belarus, and Iraq. (Political correctness and government subsidies and support do the job more subtly in places like Great Britain and the U.S.) Russell Berman argues in Fiction Sets You Free: Literature, Liberty, and Western Culture that theatre encourages democratic action:

Dramatic literature, in its convening of the community, tends toward decisive activism, while the novel, with its focus on individual interiority among a polyphony of characters and addressed to the private reader, tends toward a dispersion of power. The former resonates with democracy per se, the mobilized public, the latter with liberalism and the lives of individuals. (164)

It is this understanding, conscious or unconscious on the part of the censors, which leads to attempts to ban theatre, and even to influence its content through more subtle manipulations.

Monday, January 3, 2011

After having heard Israel Kirzner at the FEE seminar on Advanced Austrian Economics, it occurred to me that the idea of the entrepreneur might be a good approach to understanding what it is that artists do, and why. Of course, one of the benefits of looking at this idea through economics is that you know if you have succeeded or not as an entrepreneur: you made profits, or not. Definite feedback. However, how does an artist know if she or he has succeeded or is succeeding? We have artists who are considered important artists who did not succeed in the market, and we have market successes that end up not lasting long within the artistic order.

Mises points out that "Profit-seeking speculation is the driving force of production" (Human Action, 325-6). How would we have to redefine "profit" to make it apply to the artistic order? What is it that artists qua artists are after in creating their work?

Hayek is interested in how the market facilitates mutual learning among people so that they end up maximizing their knowledge. How can we apply this insight to what artists do? What is it that artists are trying to learn in what they do? Can what they do be called "mutual learning"? Might this be a way to understand various artistic movements? More, Hayek shows that competition is a discovery process. Within the arts, we indeed see artists becoming most creative when they considered themselves in competition with others. Are there institutions which can foster more competition among artists?

Kirzner says that "The theory of entrepreneurial discovery sees the explanation of market phenomena in the way entrepreneurial decisions, taken under disequilibrium conditions bring about changes in prices and quantities. The market process so initiated consists of continual entrepreneurial discoveries; it is a process of discovery driven by dynamic competition, made possible by an institutional framework which permits unimpeded entrepreneurial entry into both new and old markets. The success which capitalist market economies display is the result of a powerful tendency for less efficient, less imaginative courses of productive action, to be replaced by newly discovered superior ways of serving consumers - by producing better goods and/or by taking advantage of hitherto unknown, but available, sources of resource supply. The theory focuses on the concept of discovery in contrast to the notion of the individual decision of mainstream theory" (How Markets Work, 31).

As the last sentences indicates, the Austrian approach is much more open to being applied to other social processes, such as artistic production. Artistic production, done properly, is a process of discovery, not a "decision." How can the above language be modified to apply to artistic production and, thus, to the artistic order?

How can we combine these insights to understand the artistic order? These are the questions I need to work through. It will be interesting reading more Kirzner on entrepreneurship.